Risk Disclosure

1. General Investment Risk

All investments carry risk, including the possible loss of the entire amount invested. The value of investments and the income derived from them can go down as well as up. Past performance is not indicative of future results. There is no guarantee that you will receive any return on your investment or that you will recover the amount originally invested.

2. Real Estate Market Risk

The value of real estate properties is subject to fluctuations due to a variety of factors, including but not limited to:

• Changes in local, national, or international economic conditions.
• Supply and demand dynamics in the real estate market.
• Changes in interest rates, inflation, and credit availability.
• Changes in government regulations, tax laws, and zoning restrictions.
• Environmental factors, including natural disasters and climate change.
• Neighborhood deterioration or changes in local demographics.

3. Liquidity Risk

Property tokens may not be easily transferable or tradable. Unlike publicly traded securities, there is no established secondary market for property tokens. You may not be able to sell your tokens at the price you paid, at any price, or in a timely manner. You should be prepared to hold your investment for the entire stated investment period and potentially longer.

4. Blockchain and Technology Risk

The use of blockchain technology introduces additional risks:

• Smart Contract Vulnerabilities: Smart contracts are computer programs that may contain bugs, errors, or vulnerabilities that could result in the loss of tokens or funds. While smart contracts are audited, no audit can guarantee the absence of all vulnerabilities.
• Wallet Security: You are solely responsible for maintaining the security of your blockchain wallet and private keys. Lost or stolen private keys cannot be recovered, and any tokens associated with a compromised wallet may be permanently lost.
• Network Risks: Blockchain networks may experience congestion, forks, or other disruptions that could affect transactions, token transfers, or yield distributions.
• Protocol Changes: The underlying blockchain protocol may undergo changes that could affect the functionality or value of your tokens.
• Cybersecurity Threats: Despite security measures, the Platform may be subject to hacking attempts, phishing attacks, or other cybersecurity threats.

5. Regulatory and Legal Risk

The regulatory landscape for blockchain-based investments and tokenized assets is evolving and uncertain. Changes in laws, regulations, or government policies in any relevant jurisdiction could adversely affect the Platform, the tokens, or the underlying properties. This includes but is not limited to:

• Classification of tokens as securities or other regulated financial instruments.
• Restrictions on the purchase, sale, or transfer of digital assets.
• Changes in tax treatment of digital asset investments.
• Anti-money laundering (AML) and know-your-customer (KYC) requirement changes.
• Potential prohibition of certain blockchain-based activities in specific jurisdictions.

6. Income and Yield Risk

Any projected yields or income figures presented on the Platform are estimates only and are not guaranteed. Actual yields may be lower than projected due to factors including:

• Vacancy rates exceeding projections.
• Tenant defaults or late payments.
• Higher-than-expected maintenance, repair, or renovation costs.
• Changes in market rental rates.
• Unforeseen property management expenses.
• Force majeure events affecting property operations.

Yield distributions are made at the sole discretion of Tortuga and depend on the actual performance of the underlying property. There may be periods with no distributions.

7. Concentration Risk

Investing a significant portion of your portfolio in a single property or a limited number of properties increases concentration risk. A decline in the value of that specific property or its local market could have a disproportionate impact on your investment portfolio. You should consider diversifying your investments across different asset classes, geographies, and property types.

8. Counterparty Risk

Your investment relies on various counterparties, including property managers, tenants, service providers, and Tortuga itself. The failure, insolvency, or misconduct of any of these counterparties could negatively affect your investment. While Tortuga conducts due diligence on its counterparties, no due diligence process can eliminate all risks.

9. Currency and Stablecoin Risk

Investments on the Platform are denominated in stablecoins (e.g., tUSDC). While stablecoins are designed to maintain a stable value relative to a reference currency, they may experience depegging events, regulatory actions, or issuer insolvency that could affect their value. Additionally, if property income is generated in a different currency than the stablecoin used for investment, foreign exchange fluctuations could impact returns.

10. Tax Risk

Tax laws applicable to digital asset investments are complex, evolving, and may vary by jurisdiction. You are solely responsible for determining your tax obligations related to your investments on the Platform. We strongly recommend consulting a qualified tax professional before investing and for ongoing tax compliance.

11. No Investment Advice

Nothing on the Platform constitutes financial, investment, legal, or tax advice. All information provided is for informational purposes only. You should consult with qualified professional advisors before making any investment decision. Tortuga does not act as a financial advisor, broker, or dealer.